Giuliani Associates Arrested On Campaign Finance Charges

NEW YORK — Two European-born businessmen who reportedly helped former New York City Mayor Rudy Giuliani search for political dirt abroad have been arrested on campaign-finance charges, federal prosecutors said Thursday.

An indictment unsealed Thursday in Manhattan federal court accuses Lev Parnas and Igor Fruman of trying to buy influence for themselves and a Ukrainian elected official using foreign money and so-called straw donors.

"The defendants broke the law to gain political influence while avoiding disclosure of who was actually making the donations and where the money was coming from," Manhattan U.S. Attorney Geoffrey Berman said at a news conference.

The FBI apprehended Parnas and Fruman Wednesday evening at Dulles Airport near Washington, D.C., where they were about to board an international flight with one-way tickets, federal officials said.

Parnas, a Ukraine native, and Belarus-born Fruman were slated to appear in a Virginia federal court Thursday afternoon, a spokesperson for the U.S. attorney's office said.

Andrey Kukushkin, another Ukrainian-born man involved in the alleged scheme, was arrested in California, while a fourth defendant, American businessman David Correia, is not yet in custody, officials said. All four men are U.S. citizens, according to the indictment.

Giuliani has said Parnas and Fruman are his clients, and the two men introduced the former mayor to several Ukrainian officials to discuss a possible investigation of former Vice President Joe Biden, according to The Wall Street Journal, which first reported their arrests.

Efforts by Giuliani and President Donald Trump to get Ukraine to probe Biden and his son are at the heart of the impeachment inquiry the House of Representatives launched late last month. Parnas and Fruman were scheduled to give depositions to congressional investigators this week, The New York Times reported.

Giuliani told Fox News he finds the men's arrests "extremely suspicious." He said he represents the pair in a different matter and that Manhattan federal prosecutors had not contacted him, according to news reports.

Prosecutors say Parnas and Fruman made sizeable donations last year to a political committee and a congressional campaign as they made a push to oust the U.S. ambassador to Ukraine on behalf of an unnamed official in that country.

The pair's $325,000 gift to the political committee was made in the name of a sham natural gas company to conceal the source of the money, prosecutors said. The committee spent about $3 million on behalf of an unidentified congressman for whom Parnas and Fruman had also committed to raising more than $20,000, according to prosecutors.

Around the time of that commitment, Parnas asked for the congressman's help in his effort to push out the ambassador, which he undertook "at the request of one or more Ukrainian government officials," the indictment says.

The Trump administration reportedly recalled its ambassador to Ukraine, Marie Yovanovitch, in May. Yovanovitch, an Obama appointee who also worked in George W. Bush's administration, had clashed with Ukrainian Prosecutor General Yuriy Lutsenko, who had discussed the Biden matter with Giuliani before Lutsenko was fired in August, according to The New York Times.

Parnas and Fruman are also accused of coordinating donations to federal and state campaigns funded by a foreign national with "Russian roots" to benefit a marijuana business they were forming with Kukushkin and Correia, the indictment says.

Bill Sweeney, the assistant director in charge of the New York FBI, described the pair's alleged crimes as "deliberate lawbreaking."

"These allegations are not about some technicality, a civil violation or an error on a form," Sweeney told reporters. "This investigation is about corrupt behavior."